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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

WASATCH MANUFACTURING
Master Budget

Unit Sales
Price per Unit
Sales Revenue

Cash Sales (30%)


Credit Sales (70%)
Total Cash Collections

Unit Sales
Plus: Desired Ending Inventory
Total: Needed
Less: Beginning Inventory
Units to Produce

Chapter 9: The Master Budget

Sales Budget
December
January
February
7000
8000
9000
$15
$15
$15
105,000 $
120,000 $
135,000 $

Cash Collections Budget


January
February
$
36,000 $
40,500 $
$
73,500 $
84,000 $
$

109,500 $

Production Budget
January
8000
1800
9800
1600
8,200

124,500 $

February
9000
1720
10720
1800
8,920

March
8600
$15
129,000 $

April
9400
$15
141,000

March
Quarter
38,700 $
115,200
94,500 $
252,000
133,200 $

March
8600
1880
10480
1720
8,760

367,200

Quarter
25600
1880
27480
1600
25,880

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Direct Materials Budget


January
February
Units to be Produced
8,200
8,920
Multiply by: Quanitity of DM needed per unit
4
4
Quantity of DM Needed for Production (lbs)
32,800
35,680

March
8,760
4
35,040

Quarter
25,880
4
103,520

Plus: Desired Ending Inventory of DM (lbs)


Total Quantity of DM neeeded (lbs)

5,352
38,152

5,256
40,936

5,328
40,368

5,328
108,848

Less: Beginning Inventory of EM (lbs)


Quantity of DM to Purchase (lbs)
Multiply by: Cost per Pound

4,920
33,232
1

5,352
35,584
1

5,256
35,112
1

4,920
103,928
1

Total Cost of DM Purchases

33,232

35,584

35,112

103,928

Cash Payments for Direct Material Purchases Budget


January
February
December Purchases (from A/P)
37000
January Purchases
8,308
24,924
February Purchases
7,116.80
March Purchases
Total Cash Payments

Units Produced
Multiply by: Hours per Unit
Direct Labor Hours
Multiply by: Direct Labor Rate per Hour

Chapter 9: The Master Budget

45,308 $

32,041 $

Cash Payments for Direct Labor Budget


January
February
8,200
8,920
0.10
0.10
820
892
$

15 $

15 $

March

Quarter
37,000
33,232
28,467.20
35,584
8,778
8,778
37,245 $
114,594

March
8,760
0.10
876

Quarter
25,880
0.10
2,588

15

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MANAGERIAL ACCOUNTING - Fourth Edition


Direct Labor Cost

Chapter 9: The Master Budget

Solutions Manual
$

12,300 $

13,380 $

13,140 $

38,820

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Cash Payments for Manufacturing Overhead Budget


January
February
Rent (fixed)
10,000
10,000
Other Manufacturing Overhead (fixed)
6,000
6,000
Variable Manufacturing Overhead Costs
10,250
11,150
Cash Payments for Manufacturing Overhead
$
26,250 $
27,150 $

March
10,000
6,000
10,950
26,950 $

Quarter
30,000
18,000
32,350
80,350

Cash Payments for Operating Expenses Budget


January
February
Variable Operating Expenses
10400
11700
Fixed Operating Expenses
2200
2200
Cash Payments for Operating Expenses
$
12,600 $
13,900 $

March
11180
2200
13,380 $

Quarter
33280
2200
35,480

Combined Cash Budget


January
February
17,000 $
15,042 $
$
109,500 $
124,500 $
126,500
139,542

March
17,071
133,200 $
150,271

Quarter
17,000
367,200
384,200

Cash Balance, Beginning


Plus: Cash Collections
Total Cash Avaliable
Less Cash Payments:
DM Purchases
Direct Labor
Man Overhead Costs
Operating Expenses
Tax Payment
Equipment Purchases
Total Cash Payments
Ending Cash before Financing
Financing:
Borrowings
Chapter 9: The Master Budget

$
$
$
$

$
$

45,308
12,300
26,250
12,600

$
$
$
$

20,000
116,458 $
10,042 $
5000

32,041
13,380
27,150
13,900
28000
8,000
122,471
17,071
0

$
$
$
$

$
$

37,245
13,140
26,950
13,380

$
$
$
$

25,000
115,715 $
34,556 $

114,594
38,820
80,350
35,480
28000
53,000
350,244
33,956
5000
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MANAGERIAL ACCOUNTING - Fourth Edition


Repayments
Interest Payments
Total Financing
Cash Balance, Ending

Chapter 9: The Master Budget

Solutions Manual

5000
15,042 $

0
0
0
17,071 $

-5000
-187.5
-5187.5
29,369 $

-5000
-187.5
-187.5
33,581

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

Budgeted Manufacturing Cost per Unit


Desired Materials cost per Unit: 4 lbs each x $1 per pound
Direct Labor cost per Unit
Variable manufacturing costs per unit
Fixed manufacturing overhead per unit
Cost of manufacturing each unit

$4.00
1.5
1.25
0.75
$7.50

Budgeted Income Statement


Sales Revenue
Less: COGS
Gross Profit
Less: Operating Expenses
Less: Depreciation Expenses
Operating Income
Less: Interest Expense
Less: Income Tax Expense
Net Income

Chapter 9: The Master Budget

$
$
$
$
$
$

384,000
($192,000)
192,000
35,480
10,000
146,520
-187.5
33,656.48
112,676

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MANAGERIAL ACCOUNTING - Fourth Edition

Solutions Manual

May

6800
$15
102,000

Chapter 9: The Master Budget

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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MANAGERIAL ACCOUNTING - Fourth Edition

Chapter 9: The Master Budget

Solutions Manual

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